Bromwich: Looking Ahead After Deepwater HorizonApril 20, 2012
By Michael R. Bromwich
Appeared on Politico.com
Two years ago Friday, the Deepwater Horizon offshore oil-drilling rig was the scene of a devastating accident that killed 11 people, injured scores of others and led to a massive oil spill that created the largest environmental disaster in U.S. history.These events stunned the nation, sent shock waves through the offshore oil and gas industry and reverberated around the world. The oil and gas industry and the U.S. government were forced to admit that the safeguards designed to prevent a deepwater blowout were not effective; that no one had prepared adequately for containing a subsea accident, and that tools for responding to a major oil spill had advanced little in the 20 years since the Exxon Valdez disaster.
There was plenty of blame to go around — much of it assigned to the companies involved in drilling the well. But much was also placed on the former Minerals Management Service.
Though some agency employees had been involved in serious episodes of misconduct in the years preceding the spill, that was only a tiny fraction of the sprawling agency’s staff. Even so, politicians and some in the media worked to fit those episodes into a narrative that spread the blame for the Deepwater Horizon oil spill to the agency. That became part of the conventional wisdom.
In fact, the risks associated with deepwater drilling had been badly underestimated; the regulatory regime badly needed to be bolstered; capabilities to contain a subsea accident needed to be developed, and spill response assets needed to be enhanced.
Tragedy and disaster frequently lead to reexamining accepted truths and old ways of doing business. Deepwater Horizon prompted a flurry of activity within both the offshore industry and the U.S. government.
Even before I arrived at the Interior Department in late June 2010, structural flaws had been identified within the former MMS that had impeded and impaired its ability to carry out basic regulatory and enforcement functions. For example, the same agency that collected royalties and revenues from offshore leases was also responsible for making balanced decisions about offshore resource development – and with both regulating the industry and enforcing those regulations.
The agency never had the resources to do all that. Inherent tension between its different missions caused the emphasis on some to come at the expense of others. MMS directors came to view raising revenue for the Treasury as the top priority. This drove resource development decisions, and gave many decisions a more pro-development bias than if there had been less pressure to generate revenue.
At the same time, the agency’s regulatory and enforcement components suffered from extreme neglect as well as lack of staff and money.
In the two years since the Deepwater Horizon disaster, those structural issues have been addressed through a comprehensive reorganization, completed last October. The revenue collection imperative no longer drives resource development, regulatory or enforcement decisions because revenue collection is structurally separate from the other functions. The reorganization also created a regulator that has the potential to keep pace more effectively with the risks of offshore drilling.
In short, after decades of neglect, structures have been created that help rather than impair the government’s important regulatory objectives.
But the work is not done. Before Deepwater Horizon recedes further in our collective memory, industry and the U.S. government must take steps to address the substantial work that still lies ahead. This includes:
- Industry investments in safety and prevention must keep pace with the advancing technology of offshore drilling and exploration in frontier areas like ultra-deep water and the Arctic;
- Advances in these areas must be broadly, and freely, shared within industry and with the government;
- An intensive private-public research program must be created and maintained to explore the environmental effects of offshore drilling, especially in sensitive areas;
- The technical expertise of federal regulators needs to be enhanced by providing incentives for engineers to choose careers in public service and by promoting exchange programs with industry and with foreign regulators;
- Adequate funding for the offshore regulator must be sustained over time; and
- With growing interest and activity around the world, offshore exploration and development must be approached as a global rather than national issue.
These are critical projects that industry and government must pursue over the long term. They must be addressed thoughtfully and carefully, but also aggressively – sometimes separately, sometimes jointly through private-public partnerships.
The path forward may not seem as clear as it was in the immediate aftermath of Deepwater Horizon, but meaningful and sustained progress on these fronts will determine the future of responsible offshore development. If we lose focus on these issues and lack a sense of continuing urgency, we will have failed to heed some of the central and enduring lessons of Deepwater Horizon.
Michael R. Bromwich is the former director of the Department of the Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement. He is now managing principal of The Bromwich Group.